Here’s what buyers need to do to score a house in a red-hot market

With continued strong demand for homes in North Texas and such a small number of homes on the market, it takes lots of effort and even some sacrifices to come out on top as a buyer.

There were only 2,418 homes listed for sale in Dallas-Fort Worth in March, down 88% from the 20,853 available two years ago, according to the Texas Real Estate Research Center at Texas A&M University. That has made bidding wars common across the country, especially in D-FW.

Prices have soared from a median sale price of $318,045 in March 2020 to a record $380,000 in March 2022. Houses are selling for an average 4% over the asking price across all North Texas counties, according to multiple listing services data.

Todd Luong of Re/Max DFW Associates says buyers need to make their offers as attractive to the seller as possible to compete against sometimes 20 or 30 offers. The cutthroat environment and high pricing sometimes come to a shock to prospective Texans, he said.

“I get a lot of buyers from California, of course. A lot of them still don’t know very much about Texas,” Luong said. ”They come here thinking they can buy a mansion for $300,000, and that’s not the case. Things are different than three years ago.”

Considering the realities of such a tight housing market, here’s what local real estate agents say buyers should do to get a home:

It takes endurance

With so much activity in the market, buyers need to be ready for their offers to be rejected and to react quickly, said Katie Harris of Rogers Healy & Associates.

“When buyers go in with a really good, even-keel head on their shoulders, they’re going to be more prepared to stay grounded through the process and then be ready to jump on the right opportunity when it appears,” she said.

Realtor-up

With all the complexities of negotiations and paperwork throughout the process, agents and successful buyers warn against trying to buy a home without a real estate agent.

“I think it’s really important at this point to have somebody in your corner that can help you walk through this and understand very specifically how it relates to you as an individual seller or buyer,” said Bryan Pacholski, senior managing director of Compass in Dallas -Fort Worth.

Know what you want

Leigh Calvert, an agent with Douglas Elliman Real Estate, said buyers should be careful how much they let outside opinions influence their buying decisions.

“Purchasing a home is one of the biggest investments people make, and it’s important to be firm in your decisions whether it relates to neighborhoods you are interested in, negotiating, conditions and more.”

Waive contingencies

To be competitive, Luong recommends buyers waive the appraisal contingency on their offer, meaning they would need enough cash to make up the difference between the sale price and a low appraisal.

“As a bonus, you can even provide proof of funds to the seller to show that you have enough cash to make up the difference if the appraisal comes in low. This will increase the chances of your offer being accepted.”

Luong also says they should waive the finance contingency, which gives buyers the right to terminate the contract if their loan is denied. He said buyers should be preapproved by a mortgage lender and submit that letter along with the offer.

Offer a leaseback

Luong said buyers should offer to lease the property back to the seller for free after the sale, a frequent request by sellers in this market. Before the pandemic, most leasebacks were up to a few days or a week, he said, but now some sellers want to stay in the property for multiple months after the sale.

“Chances are the seller will want a leaseback. By being proactive, this shows the seller that you are a generous and considerate buyer. Sellers like working with people who are generous and considerate. Who wouldn’t?

»The Texas Squeeze: A series examining the high cost of high growth in North Texas.

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